DOCTRINE:If the fact of improper packing is known to the carrier or his servants, or apparent upon ordinary observation, but it accepts the goods notwithstanding such condition, it is not relieved of liability for loss or injury resulting therefrom.
- The City of Iloilo requisitioned for rice from the National Rice and Corn Corporation (NARIC).
- NARIC shipped 1,726 sacks of rice consigned to the City of Iloilo on board of SS General Wright belong to Southern Lines.
- The City of Iloilo received the shipment and paid the amount stated in the bill of lading (around Php 63K).
- However, at the bottom of the bill of lading, it was noted that City of Iloilo received the merchandise in the same condition as when shipped, except that it received only 1,685 sacks.
- Upon actual weighing, it was discovered that the shortage was equal to 41 sacks of rice.
- Thus, the City of Iloilo filed a complaint against NARIC and Southern Lines for the recovery of the value of the shortage of the shipment of rice (Php 6,486.35).
- The lower court absolved NARIC but sentenced Southern Lines to pay the amount.
- CA affirmed.
- Hence, this petition for review.
- Southern Lines claims exemption from liability by contending that the shortage in the shipment of rice was due to such factors as shrinkage, leakage or spillage of the rice on account of the bad condition of the sacks at the time it received the same and negligence of the agents of City of Iloilo in receiving the shipment.
- Whether Southern Lines is liable for the loss or shortage of the rice shipped.YES
- Whether the City of Iloilo is precluded from filing an action for damages on account of its failure to present a claim within 24 hours from receipt of the shipment as stated in the bill of lading.NO
- YES. The SC held that the contention of Southern Lines with respect to the improper packing is untenable.Under Art. 361 of the Code of Commerce, the carrier, in order to free itself from liability, was only obliged to prove that the damages suffered by the goods were “by virtue of the nature or defect of the articles.” Under Art. 362, the plaintiff, in order to hold the defendant liable, was obliged to prove that the damages to the goods is by virtue of their nature, occurred on account of its negligence or because the defendant did not take the precaution adopted by careful persons.It held that if the fact of improper packing is known to the carrier or his servants, or apparent upon ordinary observation, but it accepts the goods notwithstanding such condition, it is not relieved of liability for loss or injury resulting therefrom.
- NO. The SC noted that Southern Lines failed to plead this defense in its answer to City of Iloilo’s complaint and, therefore, the same is deemed waived and cannot be raised for the first time.The SC also cited the finding of the CA that City of Iloilo filed the action within a reasonable time; that the action is one for the refund of the amount paid in excess, and not for damages or the recovery of shortage; the bill of lading does not at all limit the time for the filing of action for the refund of money paid in excess.